Taiyo Hawaii Company, Ltd. - Page 4

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          portion of the realty was known as the "Ginter Property" and the            
          other as the "Gomes Property".                                              
               Petitioner initially continued Fudosan's lead and sought to            
          develop the realty.  An architect was retained to prepare                   
          development plans that were submitted to the local county                   
          planning commission responsible for land development.  Petitioner           
          proposed that the Ginter property, which was zoned for single-              
          family residences, be subdivided into 7,500- and 15,000-square-             
          foot residential lots with houses.  Subsequently, petitioner                
          commissioned a feasibility study concerning development of a 9-             
          or 18-hole golf course in proximity with the Ginter subdivision.            
          Petitioner sought to develop the Gomes property into                        
          approximately 300 subdivided residential units and a botanical              
               Prior to the taxable years before the Court, petitioner                
          encountered significant impediments that ultimately proved fatal            
          to its development plans.  On several occasions, the County of              
          Hawaii proposed the construction of a major highway through the             
          Ginter property, which would have provided the necessary access             
          for development.  The proposed highway was never constructed.               
          Also, the Gomes property was located in a flood plain, and                  
          substantial drainage work would have been required prior to                 
          further development.  Petitioner determined that the cost                   
          (several millions of dollars) to improve the Ginter and Gomes               

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Last modified: May 25, 2011